Renewed Emphasis On Wealth

February 7, 1997

For more than half a century politicians and policy makers have been fixated on the need to create more jobs -- guided by the idea that a free economy could not create enough of them without government's help. Observers say the emphasis is now shifting to ways to create more wealth.

A government jobs-oriented policy is hobbled by the fact that government seldom knows how and where to create them, critics say. Often it will focus on protecting endangered jobs, failing to recognize that job destruction is necessary to job creation.

Research has demonstrated that when job growth is strong in the economy, it takes place in many industries -- not just a few.

A recent study by Cognetics, Inc. of the fastest-growing U. S. firms found that three percent of all firms accounted for 80 percent of all jobs created between 1991 and 1995.

But these firms were found in all industries.

Less than two percent of the big job-creators were in high technology.

On the other hand, a study from Canada's Fraser Institute last year demonstrated that governments strongly committed to economic freedoms were faster-growing and wealthier. Looking at data covering 100 nations over 20 years, the 17 nations with the most improved ratings had strong growth rates, while the 15 nations where freedoms dropped showed real per capita declines in wealth.